2020 Deal-Making Roundup

WHITEPAPER Maureen Riordan, Senior Deals Analyst, Biomedtracker Deanna Kamienski, Senior Deals Analyst, Biomedtracker

Introduction

Against a backdrop of unprecedented disruption, medtech market also showed a strong pandemic the biopharma and medtech industries reached influence in overall deal-making activity, in incredible heights for deal-making activity during particular featuring in vitro diagnostics for SARS- 2020. This was partly necessitated by the acute CoV-2 and companies in the digital health space. need to advance COVID-19 therapeutics and diagnostics as quickly as possible, requiring large This report provides an overview of alliance, amounts of capital and shared expertise. The merger and acquisition, and financing deal activity other driving factor was the buoyancy of capital across the worldwide biopharma, medical device, markets, as investors actively sought drug- and and in vitro diagnostics industries during 2020 as device-maker opportunities, previously thought of reported by Biomedtracker. The overall data are as defensive holdings. presented across deal types, therapy areas, and payment or financing structures. The top deals In total, biopharma companies signed over 1,000 by dollar value in each space are closely detailed. alliances in 2020, with one in five related to Note that potential deal value (PDV) is defined COVID-19 assets. $130bn was exchanged in M&A as the sum of disclosed up-front payment(s) activities in the sector, while overall financing for plus any announced or received pre- or post- the year steadily increased quarter-on-quarter for commercialization milestone payment(s). a total of over $140bn. The comparably smaller

2 / March 2021 © Informa UK Ltd 2021 (Unauthorized photocopying prohibited.) Biopharma Alliances

Biopharma alliances for 2020 reached a total to quarter; except for a slight dip during Q3, the potential deal value of $186.7bn from 1,087 aggregate deal value mostly followed the same completed transactions [Figure 1]. Throughout trajectory. Of the 362 deals with disclosed values, the year, deal volume steadily increased quarter 54 topped the billion-dollar mark.

Figure 1. 2020 biopharma deal volume and value distributions, by quarter

0 2 0000 2 00 22 0000 20 21 0000 200 0000 10

ea oume 20000 100 10000 0 ota ea aue (Um)

0 0 1 2

ea ota ea aue

Source: Biomedtracker, February 2021

In the largest alliance of the year, Merck KGaA and commercialization. Artios originally licensed and Artios Pharma partnered in a global three- the DDR IP from Cancer Research Technology in year strategic research collaboration, worth up 2016. The Merck KGaA partnership will support to $6.9bn, to jointly identify multiple synthetic advancement of Artios’s other DDR pipeline lethal targets for up to eight oncology drug projects into the clinic, including lead programs, targets associated with DNA damage response inhibitors of Pol-theta (solid tumors) and ATR (DDR) processes [Table 1]. Artios could also (targeting cancer; in-licensed from MD Anderson see up to $860m in total milestones per target. Cancer Center and ShangPharma in 2019), which Artios has opt-in rights for joint development are specifically excluded from the collaboration.

Potential Deal Royalty Licensee Licenser Products/Technologies Deal Value Date Range ($m) Artios’s nuclease-targeting discovery platform to jointly identify multiple synthetic lethal targets for precision Artios oncology drug candidates; Merck adds experience and Double- Feb. 27 Merck KGaA 6,910 Pharma resources in the field of DNA Damage Response and digits has the right to opt into exclusive development and commercialization of compounds on up to eight targets Joint development and commercialization of Daiichi’s DS- Daiichi 1062 (in Phase I for non-small cell lung cancer and triple- Jul. 27 AstraZeneca 6,000 NA Sankyo negative breast cancer) globally, excluding Japan where Daiichi retains exclusive rights Global development and commercialization (on a co- Seattle Sep. 14 Merck & Co. exclusive basis) of Seattle Genetics’ ladiratuzumab vedotin, 4,200 NA Genetics which is in Phase II for breast cancer and other solid tumors Silence’s GalNAc-siRNA platform to discover and develop High-single Silence initially five siRNA targets in cardiovascular, renal, metabolic, to low- Mar. 25 AstraZeneca 4,080 Therapeutics and respiratory diseases; AZ has option to extend to double another five targets digits Janssen contributes proprietary antigen-binding domains for up to four tumor-associated antigen targets; Fate will Double- Fate Apr. 2 Janssen Biotech apply its iPSC platform to research and preclinically develop 3,916 digits to Therapeutics new chimeric antigen receptor (CAR) NK and CAR T-cell mid-teens cancer immunotherapies Joint global development and commercialization of Genmab’s DuoBody-CD3xCD20 (epcoritamab; GEN3013), DuoHexaBody-CD37 (GEN3009), and DuoBody-CD3x5T4 (GEN1044); discovery collaboration Jun. 10 AbbVie Genmab combining Genmab’s DuoBody technology and 3,900 22–26% AbbVie’s payload and antibody-drug conjugate platform for up to four additional differentiated next- generation antibody candidates, potentially across both solid tumors and hematological malignancies Undisclosed firm gets global rights to develop and Top 10 commercialize multiple products in combination with undisclosed Jun. 24 Alteogen Alteogen’s recombinant human hyaluronidase enzyme 3,881 NA pharma ALT-B4, derived using its Hybrozyme protein engineering company technology Sage’s zuranolone (SAGE-217) for major depressive disorder, postpartum depression and other psychiatric disorders, and SAGE-324 for essential tremor and other neurological High-teens Sage Nov. 24 Biogen disorders; in the US, both firms will jointly develop and 3,125 to low- Therapeutics commercialize, while Biogen gets exclusive rights to develop twenties and commercialize the compounds outside the US, except in Japan, Taiwan, and South Korea Repare’s CRISPR-enabled genome-wide synthetic lethal Bristol Myers Repare target discovery platform, SNIPRx, to jointly identify May 26 3,065 Undisclosed Squibb Therapeutics multiple synthetic lethal precision oncology targets for drug candidates IDEAYA’s synthetic lethality programs MAT2A (IDE397), Pol High-single IDEAYA Theta (POLQ), and Werner Helicase (WRN), which have to sub-teen Jun. 16 GlaxoSmithKline 3,030 Biosciences potential applicability in lung, prostate, breast, colorectal, double- and ovarian cancer digits

Source: Biomedtracker, February 2021

4 / March 2021 © Informa UK Ltd 2021 (Unauthorized photocopying prohibited.) For 2020 overall, alliances including an announced alliance to globally develop and commercialize milestone component dominated over up-front (on a co-exclusive basis) Seattle Genetics’ payments in deal structures. This portion of ladiratuzumab vedotin, an investigational partnerships accounted for 75% of the aggregate antibody-drug conjugate (ADC) targeting LIV- deal value in those 362 deals with disclosed PDVs 1, in Phase II for breast cancer and other solid [Figure 2]. There were 41 deals in all with potential tumors. SG gets up front $600m and a $1bn future payments of more than a billion dollars, equity investment through Merck’s purchase of SG led by Merck KGaA’s December 2020 partnership common stock at $200 per share (a 32% premium) with Artios. US-headquartered Merck & Co (not to and could also see up to $2.6bn in milestone be confused with German Merck KGaA) paid the payments ($850m development, $1.75bn sales). highest up-front payment of 2020 in a September

Figure 2. 2020 biopharma alliance deal breakdown, by payment type

0000

20000 2 12 10000 1 22

ota ea aue (Um) 000

1 0 1 2

Upfront ietone

Source: Biomedtracker, February 2021

© Informa UK Ltd 2021 (Unauthorized photocopying prohibited.) March 2021 / 5 Oncology was the most active therapeutic infectious disease (with 273 deals making up 25% area for partnering during 2020, with 386 of all of the total), and neurology/psychiatry, with 120 partnerships (36%) having at least one cancer alliances or 11% of the aggregate. asset [Figure 3]. Oncology was followed by

Figure 3. 2020 biopharma alliances across therapy area, by deal volume

Oncology 386 (36%)

Infectious disease 273 (25%)

Neurology/Psychiatry 120 (11%)

Other* 100 (9%)

Autoimmune/immunology 75 (7%)

Not Specified 70 (6%)

Ophthalmology 45 (4%)

Cardiovascular 40 (4%)

Endocrine 35 (3%)

Metabolic 32 (3%)

0 50 100 150 200 250 300 350 400 450

Number of alliance deals (% of total)

Note: Deals involving more than one asset or therapy area may be counted multiple times; cumulative percentages will therefore exceed 100%.

*Includes allergy, dermatology, ENT/dental, gastroenterology, hematology, obstetrics/gynecology, orthopedics, renal, rheumatology, and urology.

Source: Biomedtracker, February 2021

6 / March 2021 © Informa UK Ltd 2021 (Unauthorized photocopying prohibited.) Not surprisingly, oncology deals also made up in depression and movement disorders. Biogen the greatest percentage (49%) of aggregate also did large neuro-focused deals with Sangamo potential 2020 deal value, with $91.6bn [Figure Therapeutics ($2.7bn) for up to 12 CNS programs, 4]. Next was neurology/psychiatry, which fetched and Denali Therapeutics ($2.2bn) for Parkinson’s $36.4bn in aggregate PDV (20% of the 2020 and other neurodegenerative diseases. Deals for total). The top deal here was Biogen and Sage which no specific therapeutic area was specified Therapeutics’ $3.1bn collaboration to develop and were next at $22.5bn, making up 12%. commercialize potential breakthrough therapies

Figure 4. Biopharma alliances across therapy area, by deal value

ther utoimmune 21bn 11 immunoogy ardioacuar epiratory 20bn 11 12bn 12bn

ndocrine phthamoogy bn bn 2 Infectiou dieae bn

$187bn etaboic total PDV 12bn

euroogy ychiatry bn 1 ncoogy 2bn

Not Speciﬁed, 2bn 12

Note: Deals involving more than one asset or therapy area may be counted multiple times; cumulative percentages will therefore exceed 100%.

*Includes allergy, dermatology, ENT/dental, gastroenterology, hematology, obstetrics/gynecology, orthopedics, renal, rheumatology, and urology.

Source: Biomedtracker, February 2021

© Informa UK Ltd 2021 (Unauthorized photocopying prohibited.) March 2021 / 7 During 2020, biopharma deals to address SARS- manufacturing, and commercialization rights to CoV-2, the virus that causes COVID-19, greatly Mesoblast’s Phase III off-the-shelf mesenchymal impacted the deal-making landscape with 215 stromal cell therapy remestemcel-L, with partnerships signed in all: 130 for therapeutics an initial focus on acute respiratory distress and 85 for vaccines [Figure 5]. This made up 78% syndrome (ARDS), including those associated of the overall deal volume within the infectious with COVID-19. The deal is worth up to $1.4bn disease category and 20% of the overall deal ($50m up front, including $25m in equity; volume across all therapeutic areas. The 30 $505m pre-commercialization milestones for deals with disclosed values had an aggregate ARDS indications; $50m for manufacturing PDV of $5.4bn. In the highest-valued COVID-19 achievements; and sales milestones of up to partnership of the year, in November 2020, $750m). Novartis licensed exclusive global development,

Figure 5. 2020 total deal volume for biopharma COVID-19 partnerships, by quarter

100

0 1 1 ea oume 1 0 0 1 0 1 2

herapeutic accine

Source: Biomedtracker, February 2021

8 / March 2021 © Informa UK Ltd 2021 (Unauthorized photocopying prohibited.) Biopharma Acquisitions

For the full year, biopharma M&A activity totaled there were significant upsurges in the second $129.9bn from 149 transactions, 82 of which half of the year mostly due to 16 billion-dollar- had disclosed values [Figure 6]. The deal volume plus transactions signed during that time period, consistently increased quarter to quarter. There versus just four M&As hitting that milestone was a slight dip in deal value in Q2, but then during H1 2020.

Figure 6. 2020 biopharma M&A activity, by quarter

60 80,000

49 70,000 50 44 60,000 40 35 50,000

30 40,000

21 30,000 Deal Volume 20 20,000 10 Total Deal Value (US$m) 10,000

0 0 Q1 Q2 Q3 Q4

# of Deals Total Deal Value (US$m)

Source: Biomedtracker, February 2021

During 2020, 14 biopharma M&As were finalized mediated disease space. Alexion focuses on that had a deal value of one billion or more, complement inhibition, with a component 5 while nine of those exceeded the two-billion- (C5) protein inhibitor franchise led by Soliris dollar-plus mark [Table 2]. AstraZeneca’s $39bn (eculizumab), a first-in-class anti-complement C5 buy of Alexion Pharmaceuticals, the largest M&A monoclonal antibody approved in many countries for the biopharma industry overall in 2020, is for paroxysmal nocturnal hemoglobinuria (PNH), expected to close during Q3 2021. AZ is partially atypical hemolytic uremic syndrome, generalized funding the cash and stock transaction with a myasthenia gravis, and neuromyelitis optica concurrent $17.5bn bridge-financing facility. spectrum disorder. More recently, Alexion The Big Pharma gains expertise in the immune- launched Ultomiris (ravulizumab), a second-

© Informa UK Ltd 2021 (Unauthorized photocopying prohibited.) March 2021 / 9 generation C5 mAb with a more convenient dosing business through Portola’s Andexxa (coagulation regimen and orphan drug exclusivity for PNH factor Xa (recombinant), inactivated-zhzo; branded through 2025. Outside the C5 space, Alexion has as Ondexxya in the EU), the only approved a pipeline of 11 molecules across over 20 clinical reversal agent for the anticoagulant effects of development programs. Alexion itself bought factor Xa inhibitors apixaban or rivaroxaban in fellow public biotech Portola Pharmaceuticals uncontrolled bleeding. for $1.44bn during Q2, expanding its critical care

Table 2. Top 10 2020 biopharma M&As, by potential deal value

Date Potential Deal Date Closed Acquirer Acquired (Business) Terms Announced Value ($m) $175 per share, $60 in cash Alexion and 2.1243 AZ American NA (expected to Pharmaceuticals Depositary Shares (with each Dec. 12 AstraZeneca 39,000 close Q3 2021) (immune-mediated ADS representing one-half of an rare diseases) ordinary share), a 45% premium; 7.8x sales Gilead Immunomedics $88 in cash per share (a 108% Sep. 13 Oct. 23 21,000 Sciences (oncology therapies) premium) MyoKardia Bristol Myers (cardiovascular $225 in cash per share (a 69% Oct. 5 Nov. 17 13,071 Squibb disease-focused premium) pipeline) Momenta Johnson & Pharmaceuticals $52.50 in cash per share (a 74% Aug. 19 Oct. 1 6,500 Johnson (immune-mediated premium) diseases) Forty Seven (immuno- Gilead $95.50 in cash per share (a 95% Mar. 2 Apr. 7 oncology monoclonal 4,900 Sciences premium); 3.64x sales antibodies) Asklepios Biopharmaceutical $2bn in cash up front and up to Oct. 26 Dec. 2 Bayer 4,000 (gene therapy pipeline $2bn in success-based earn-outs and platform) Principia Biopharma $100 in cash per share (a 13% Aug. 17 Sep. 28 Sanofi (immune-mediated 3,850 premium) diseases) VelosBio (cancer therapies targeting Nov. 5 Dec. 18 Merck receptor tyrosine $2.75bn in cash up front 2,750 kinase-like orphan receptor 1) Aimmune Therapeutics $34.50 in cash per share (a 168% Aug. 31 Oct. 14 Nestle (treatments for food 2,600 premium) allergies) Takeda’s Japanese NA (expected Consumer Healthcare Aug. 24 to close by 31 Blackstone unit (over-the-counter $2.3bn in cash up front; 4.06x sales 2,300 March 2021) medicines and health products)

Source: Biomedtracker, February 2021

10 / March 2021 © Informa UK Ltd 2021 (Unauthorized photocopying prohibited.) Of the 20 M&A deals in 2020 that met or exceeded aggregate $49.4m in deal value within the same $1bn, the top area of interest in terms of deal billion-dollar subset of deals, accounted for the volume was oncology, with six deals [Figure most in terms of M&A dollars. 7]. Autoimmune/immunology, which had an

Figure 7. Areas of focus for 2020 biopharma M&As exceeding $1bn in potential deal value

0000 0000 0000 0000

ea oume 2 2 20000 2 1 1 1 1 1 1

10000 ota ea aue (Um) 1 1

0 0

of ea doar

Source: Biomedtracker, February 2021

Q4 turned out to be the strongest quarter of 2020 mark. The largest was AstraZeneca’s committed for biopharma fundraising. Overall financing for $17.5bn bridge-financing facility to fund its the full year totaled $141.8bn, showing a steady planned $39bn acquisition of Alexion. increase quarter to quarter [Figure 8]. Nine transactions met or topped the billion-dollar

Figure 8. Total money invested in biopharma in 2020, by quarter and deal type

0000

0000 m

20000

10000

0 1 2 ota 2020 iopharma inancing 11.bn

ebt I I unding oyaty ae ther

Source: Biomedtracker, February 2021

12 / March 2021 © Informa UK Ltd 2021 (Unauthorized photocopying prohibited.) Overall, 126 initial public offerings were The largest transactions of the year were not by completed across all industries, with most of the conventional biopharmas. At the top in pharma, in top offerings being by pharmaceutical companies. terms of dollar value, was Royalty Pharma PLC (a However, also among the top IPOs were notably buyer of biopharmaceutical royalties from future two medtech players: Maravai LifeSciences and product sales), which netted $1.9bn in its June IPO, Sotera Health [Table 3]. Within biopharma, IPO and a $1.5bn February IPO by PPD Inc., a private activity reached $23bn, with 105 completed equity-owned contract research organization. transactions and an average deal value of $219m.

Table 3. Top 10 initial public offerings in 2020

Amount Date Company Company Area(s) of Focus Raised ($m) Buys biopharmaceutical royalties from future Jun. 15 Royalty Pharma 1,920 product sales Nucleic acid production, biologics safety testing, Nov. 19 Maravai LifeSciences 1,761 and protein detection Feb. 5 PPD Contract research organization 1,547 End-to-end sterilization and microbiological and Nov. 19 Sotera Health 1,162 analytical lab testing Jun. 19 SK Biopharmaceuticals Therapies for CNS disorders and cancer 797 Therapies for autoimmune and eye diseases and Nov. 6 RemeGen 561 cancers Artificial intelligence-powered drug discovery Dec. 14 AbCellera platform to identify antibodies that can be 526 developed as drugs Develops and commercializes in-licensed drugs Oct. 8 Everest Medicines 488 in the Greater China region Jun. 8 Legend Biotech Cell therapies for cancer and infectious diseases 453 Oct. 27 Simcere Pharmaceutical Cell immunotherapies 438

Source: Biomedtracker, February 2021

© Informa UK Ltd 2021 (Unauthorized photocopying prohibited.) March 2021 / 13 Start-up firms – companies founded within own with just venture capital funding. The non- the last four years – were well represented biopharma start-up firms going public were in completed IPOs during 2020 [Table 4]. 16 end-to-end sterilization and microbiological and biopharma start-ups raised $3bn in IPO proceeds, analytical lab testing and advisory services firm accounting for 68% of the total 2020 IPO funding Sotera Health (which took the top spot in the within this group (medtech raised $1.4bn). Going category), along with Israeli medical device maker public is likely a reasonable financing route for Nano-X Imaging ($177m; digital x-ray technology), young companies with later-stage R&D programs and Renalytix AI ($79m; artificial intelligence- or with technology platforms that are generating enabled in vitro diagnostics). more candidates than they can develop on their

Table 4. Top 10 initial public offerings for start-ups in 2020

Amount Date Company/Year Founded Company Area(s) of Focus Raised ($m) End-to-end sterilization and microbiological and Nov. 19 Sotera Health/2017 1,162 analytical lab testing Develops and commercializes in-licensed drugs in Oct. 8 Everest Medicines/2017 488 the Greater China region Biosimulation technology and regulatory and Dec. 14 Certara/2017 market access services for drug discovery and 316 development Oct. 8 Kronos Bio/2017 Targeted oncology therapies 267 Small molecule kinase inhibitors for difficult-to- Dec. 3 Kinnate Biopharma/2018 257 treat, genomically defined cancers Sep.16 Dyne Therapeutics/2018 Therapies for genetically driven muscle diseases 249 Feb. 28 Passage Bio/2017 Gene therapies for rare CNS diseases 231 Precision genetic medicines based on a proprietary Feb. 5 Beam Therapeutics/2017 193 base editing technology Ocumension Jul. 10 Ophthalmic therapies 184 Therapeutics/2017 Aug. 21 Nano-X Imaging/2018 Digital micro-electromechanical technology 177

Source: Biomedtracker, February 2021

Biopharma venture capital funding for the year development of multiple promising oncology totaled $20bn from 342 transactions, making programs and further advance the company’s up 15% of all financing across all deal types for in-house drug discovery pipeline. The largest the year [Figure 9]. Series B rounds dominated VC round of 2020 was a $700m Series A round in terms of deal value, accounting for 29% of by Sana Biotechnology, which is focused on the annual aggregate within this category, led engineering cells as medicines. Sana will use the by a $236m financing by oncology start-up funds to advance discovery and development Erasca, which will use the proceeds to support within its core platforms, including gene

14 / March 2021 © Informa UK Ltd 2021 (Unauthorized photocopying prohibited.) delivery, immunology, stem cell biology, and companies raising Series A funds, followed by gene modification and control. In terms of deal Series B rounds at 96. volume, the most deals (126) were completed by

Figure 9. Total money invested in biopharma venture rounds in 2020, by round number

Undisclosed Series D, Early-Stage Series C, $4,118 $2,489 Round, $768

Series E or Undisclosed later, $379 Late-Stage Series B, $6,194 Series A, $5,796 Round, $956 Seed, $141

Source: Biomedtracker, February 2021

Overall, 2020 saw a variety of structures in II fully human monoclonal antibody targeting biopharma deal-making across all deal types. neonatal Fc receptor for the treatment of Pharma Intelligence’s In Vivo publication, in its multiple autoantibody-driven diseases, as the 13th annual Deals of the Year contest, selected lead program. J&J referred to nipocalimab as a 15 nominees in three categories – Top Alliance, potential “pipeline in a pathway,” and possibly the Top M&A, and Top Financing – and asked its best-in-class in the FcRn space. The winner among readers to select the winners. The top alliance financings was Vancouver, British Columbia- chosen was Biogen/Sage’s global collaboration based AbCellera’s $526.3m IPO. The company’s for new therapies in depression. Taking the value is tied to its high-profile antibody for the top spot in the M&A category was Johnson & treatment of COVID-19, bamlanivimab (LY- Johnson’s $6.5bn all-cash acquisition of Momenta CoV555), being developed in partnership with Eli Pharmaceuticals. The deal marks a big turnaround Lilly. Bamlanivimab is available for the treatment for Momenta, which reduced its workforce in of high-risk patients with mild-to-moderate 2018 to de-emphasize biosimilar development COVID-19 under an Emergency Use Authorization and focus instead on three novel autoimmune granted by the US Food and Drug Administration candidates, citing nipocalimab (M281), a Phase in November 2020.

Medtech partnerships and an equity investment, with the potential Medtech alliance deal volume for 2020 reached for an additional $388m in future milestone 134 transactions (split into 71 device and 63 in payments, as well as royalties. vitro diagnostics deals); only 14 had disclosed values. The top deal in terms of dollar value was Medtech companies were active in the COVID-19 China Medical’s 20-year license to Gelesis’s Plenity space, completing 34 partnerships, which made in emerging markets. Classified by the FDA as up 25% of the aggregate medtech alliance deal an “ingested, transient, space occupying device volume for the year [Figure 10]. Most agreements for weight management and/or weight loss,” (28) centered around developing test kits, assays, Plenity is made by cross-linking the naturally or tools for diagnosing or evaluating the disease. derived cellulose and citric acid to create a three- Six device companies penned agreements in this dimensional hydrogel matrix. CMS will provide area as well. $35m up front in a combination of licensing fees

Figure 10. Total deal volume for medtech COVID-19 partnerships, by quarter

1 1 1

1 1

ea oume

2 1

0 1 2

Source: Biomedtracker, February 2021

16 / March 2021 © Informa UK Ltd 2021 (Unauthorized photocopying prohibited.) Device M&As quarter to quarter, with Q3 highest overall in both. Medtech merger and acquisition value for 2020 Neither Q1 nor Q2 even reached a billion dollars reached $43.2bn from 67 transactions, 32 of in aggregate. Just three M&As hit or exceeded the which had disclosed values [Figure 11]. Both the billion-dollar mark for all of 2020, and they were deal volume and value were inconsistent from all in the second half of the year.

Figure 11. 2020 device M&A activity, by quarter

0 2 0000

000 2 21 0000 20 2000

1 20000 10

ea oume 1000 10 10000 ota ea aue (Um) 000

0 0 1 2

f ea m

Source: Biomedtracker, February 2021

© Informa UK Ltd 2021 (Unauthorized photocopying prohibited.) March 2021 / 17 For the largest medical device M&A of the retain the Teladoc name and focus on improving year, digital health companies Teladoc Health the delivery and access to healthcare for (telehealth services) and Livongo (consumer digital consumers, leveraging Teladoc’s broad integrated health monitoring and testing devices) merged services across virtual care with Livongo’s data- in an $18.5bn cash and stock transaction, which driven approach to providing health signals to made up 43% of the aggregate full-year deal value address patients with a variety of needs, including [Table 5]. Upon completion of the merger, Teladoc chronic disease care, acute and specialty care, and will own approximately 58% and Livongo the behavioral health. remainder of the combined company, which will

Table 5. 2020 medtech M&As exceeding potential deal value of $1bn

Date Date Potential Deal Acquirer Acquired (Business) Terms Announced Closed Value ($m) Livongo (artificial intelligence platform for $432.1m in cash ($11.33 for patients with chronic each Livongo share; a 32% Aug. 5 Oct. 30 Teladoc Health conditions, including premium) and issuance of 18,500 hypertension, weight 60.3m Teladoc common management, diabetes, and shares behavioral health) NA (expected Siemens Varian Medical $177.50 per share in cash (a Aug. 3 16,400 to close in Healthineers (radiotherapies for cancer) 34% premium) H1 2021) $3.5bn in cash and $4.5bn in Illumina common shares, plus contingent value NA rights entitling holders to (expected Grail (multi-cancer early Sep. 21 Illumina receive future payments 8,000 to close in detection blood test) representing 2.5% of the first H2 2021) $1bn in revenue, and 9% of revenues above $1bn, each year for a 12-year period BioTelemetry (cardiac $72 in cash per share (a 20% Dec. 18 Jan. 9, 2021 Royal Philips diagnostic and monitoring 2,750 premium) devices) $1.7bn up front ($590m in Thrive Earlier Detection cash and $1.1bn through Oct. 27 Jan. 5, 2021 Exact Sciences (tests for early cancer issuance of 9.3m Exact 2,150 detection) shares) and up to $450m in earn-outs ArcherDx (precision $325m in cash and 30m oncology research and shares of Invitae and earn- Jun. 22 NA Invitae 1,400 diagnostics products and outs of up to 27m Invitae platform) shares

Source: Biomedtracker, February 2021

18 / March 2021 © Informa UK Ltd 2021 (Unauthorized photocopying prohibited.) Diagnostics M&As diagnostics company Grail (multi-cancer early M&A activity by diagnostics players for the full detection blood test), which is expected to close year totaled $13.2bn from 24 transactions, 13 in H2 2021. Thermo Fisher Scientific had planned of which had disclosed values [Figure 12]. The to acquire fellow public life sciences company deal value rose from quarter to quarter, with Qiagen NV (molecular diagnostics and sample the exception of Q4, which was lower in deal preparation technologies) in a cash transaction value than Q3, the highest overall in terms of worth a potential $11.6bn. That deal was expected dollars. Q1 was the lowest, not even reaching a to close in H1 2021, but the offer did not achieve billion dollars in aggregate. Just three M&As hit or the minimum 66.67% acceptance threshold from exceeded the billion-dollar mark for all of 2020, Qiagen shareholders and as a result the business and all of those occurred in the second through combination agreement was terminated in August fourth quarters, led by Illumina’s September 2020. $8bn cash and stock agreement to buy molecular

Figure 12. 2020 diagnostics M&A activity, by quarter

10 000 000 000 000 000 000 ea oume 000

2 2000 ota ea aue (Um) 1 1000 0 0 1 2

f ea m

Source: Biomedtracker, February 2021

© Informa UK Ltd 2021 (Unauthorized photocopying prohibited.) March 2021 / 19 Device fundraising the least, while Q2 brought in the most dollars, For the full year, a total of $19.7bn was invested in with Q4 showing a rebound after a decrease in Q3 device players [Figure 13]. The first quarter raised fundraising.

Figure 13. Total money invested in devices in 2020, by quarter and deal type

12000

10000

000

000 m

000

2000

0 1 2 ota 2020 eice inancing 1.bn

ebt I I ther unding

Source: Biomedtracker, February 2021

20 / March 2021 © Informa UK Ltd 2021 (Unauthorized photocopying prohibited.) For 2020 overall, 11 device companies completed Venture rounds by device players totaled $3.8bn IPOs, together totaling $2.4bn, with an average for the year from 110 transactions [Figure 14], deal value of $222m. The largest transaction of making up 19% of the overall funding across all the year was the aforementioned Sotera Health deal types for the year. The category contributing IPO, but seven other device companies raised the most dollars was undisclosed early-stage more than $100m in IPOs completed during rounds, which accounted for 22% of all device the year, including Outset Medical Inc. (dialysis VC funding, led by a $700m undisclosed round devices), which raised $259m via a September by Verily Life Sciences (population health, clinical offering; pulmonary device maker Pulmonx, which care delivery, and chronic disease management netted $203m in its September IPO; and Israeli programs). firm Nano-X Imaging (digital x-ray technology), which netted $177m in its August Nasdaq listing.

Figure 14. Total money invested in device venture rounds in 2020, by round number ($m)

Undisclosed Early-Stage Round, $849 Undisclosed Late-Stage Series C, $754 Round, $624

Series Series E or Series A, D, $157 Series B, $794 later, $330 $312 Seed, $9

Source: Biomedtracker, February 2021

© Informa UK Ltd 2021 (Unauthorized photocopying prohibited.) March 2021 / 21 Diagnostics fundraising Maravai LifeSciences’ $1.76bn November initial For the full year, 2020 diagnostics financing public offering. The company is focused on nucleic totaled $13.9bn, showing an increase quarter to acid production, biologics safety testing, and quarter, with the fourth quarter the strongest of protein detection. the year [Figure 15]. The largest financing was

Figure 15. Total money invested in diagnostics in 2020, by quarter and deal type

000

000 m 000

2000

1000

0 1 2 4 ota 2020 iagnotic inancing 1.bn

ebt I I unding

Source: Biomedtracker, February 2021

Overall, 10 diagnostics IPOs were completed highest diagnostics IPO of the year. during 2020, totaling $2.9bn. The average 2020 IPO deal value was $289m. The largest, Maravai Venture rounds by diagnostics players totaled LifeSciences’ IPO, accounted for 76% of the $2.9bn for the year from 43 transactions [Figure aggregate. Five other diagnostics companies also 16], making up 20% of the overall funding raised more than $100m in IPOs throughout the across all deal types for the year. The category year, including Chinese firm Genetron Holdings contributing the most dollars was Series B rounds, (cancer molecular profiling and technologies in which accounted for 30% of all diagnostics VC molecular biology and data science), which in a funding. The largest VC financing overall was June Nasdaq listing netted $238m, the second- Grail’s May $390m Series D round.

22 / March 2021 © Informa UK Ltd 2021 (Unauthorized photocopying prohibited.) Figure 16. Total money invested in diagnostics venture rounds in 2020, by round number ($m)

Undisclosed Late- Stage Round, $316

Series E or later, $560

Series A, Series C, $273 $209

Series B, $856 Series D, $546 Seed, $24

Undisclosed Early-Stage Round, $73

Source: Biomedtracker, February 2021

About the Authors

Maureen Riordan, Senior Deals Analyst, Biomedtracker Maureen has 25 years’ experience analyzing transaction activity and trends in the biopharmaceutical, medical device, and in vitro diagnostics industries. As a Senior Deals Analyst, she uses her industry knowledge to provide insightful coverage of mergers and acquisitions, alliances, and financings for Biomedtracker, and co-authors monthly and quarterly deal-making statistics columns for In Vivo. Maureen holds a Bachelor of Arts degree in English from Niagara University, and a Master of Library Science degree from Southern Connecticut State University.

Deanna Kamienski, Senior Deals Analyst, Biomedtracker Deanna has been tracking deal-making activity since 2000. She is currently a Senior Deals Analyst for Biomedtracker and had previously contributed to the Strategic Transactions deals database. In her role she researches, analyzes, and writes summaries of alliances, mergers and acquisitions, and financings among global biopharma, medical device, and diagnostics companies. This intelligence helps clients monitor competition, find partners, value drug candidates, get informed deal structuring information, and access fundraising activities. Deanna authors a quarterly deal-making statistics article and other monthly trend pieces for In Vivo. She holds a Bachelor of Science degree from the University of Vermont.

© Informa UK Ltd 2021 (Unauthorized photocopying prohibited.) March 2021 / 23 Informa’s Pharma intelligence is home of the United States China 605 Third Avenue 23rd Floor world’s leading pharma and healthcare R&D Floor 20-22 16F Nexxus Building and business intelligence brands—Datamonitor New York 41 Connaught Road NY 10158 Hong Kong Healthcare, Sitetrove, Trialtrove, Pharmaprojects, USA China Medtrack, Biomedtracker, Scrip, Pink Sheet, In +1 908 547 2200 +85 239 667 222 +1 888 670 8900 Vivo. Pharma intelligence’s brands are trusted Australia to provide over 3000 of the world’s leading United Kingdom Level 4 Blue Fin Building 24 York Street pharmaceutical, contract research organizations 110 Southwark Street Sydney (CRO’s), medical technology, biotechnology London NSW, 2000 SE1 0SU +61 (0)2 8705 6968 and healthcare service providers, including the United Kingdom top 10 global pharma and top 10 CRO’s, with +44 20 337 73737 Pharma Intelligence © 2021. All an advantage when making critical R&D and Japan rights reserved. Pharma Intelligence commercial decisions. 21st Floor, Otemachi is a trading division of Informa UK Financial City North Tower Ltd. Registered office: Mortimer Accurate and timely intelligence about the drug 1-9-5, Otemachi House, 37-41 Mortimer Street, Chiyoda-ku London W1T3JH, UK. Registered in development pipeline is vital to understanding Tokyo England and Wales No 1072954 the opportunities and risks in today’s 100-0004 +81 3 6273 4260 biopharmaceutical marketplace—whether you are targeting an unmet medical need, investigating promising new therapies or researching drug development historical trends and treatment IPI Supergraphic patterns.1 If you are providing contract research or other services in the pharma industry, you need to For use as a backgroundstand element out. A solid understanding of your potential on white or ligh-coloredclients’ backgrounds. pipelines and competition will help you Please do not changeleave the a colorlasting or impression. the angle of the supergraphic. Contact us at [email protected]